NY Insurers, Consumer Groups Oppose Elimination of Car Rental Liability Cap

An “odd-couple” coalition of New York consumer groups and insurance industry representatives have come together to oppose a bill which would eliminate the $100 cap on a consumer’s liability for damages to a rental car.

Both groups warned of higher costs if the measure, which has passed the NY Senate and is currently pending in the legislature, is enacted. The bill would also allow car rental companies to offer “collision damage waivers” to customers in New York that are currently forbidden.

The insurers and the New York Public Interest Research Group maintain that the bill’s passage would throw the burden of rental car damage claims on to all insured drivers, and would result in premium increases.

The rental car industry points to the fact that the liability cap and damage waiver prohibition contribute to New York’s having the highest rates in the country as reasons for their repeal.